According to a report by Bloomsberg, the strong performance of the Canadian dollar is due to a surge in investor interest and confidence in commodity-exporting.

Key factors supporting the ongoing positive prospects of the Canadian economy and property market include healthy natural resources and export diversification.

The Canadian economy is built strongly upon natural resources such as its gas and oil reserves – it has the second largest oil reserve in the world and is the third-largest producer of natural gas. The Canadian government and private sector are also pumping significant funding into greater exploration to find more deposits. So successful is this particular sector of the economy that there is an employment growth rate of over 5 per cent per annum in Alberta where much of the oil and gas are sourced. In certain parts of Canada there is also a chronic shortage of workers which has prompted international headhunting and increased levels of immigration, all positive news for those investing in the Canadian property market.

Until just five years ago a significant proportion of all Canadian exports were headed for the US, but predicting the recent slump in the US economy the Canadian government has been tireless in its support of diversifying their export focus, so that today almost a quarter of all exports are headed to non-US based destinations.

In terms of the Canadian property market, in 2007 the country celebrated the fact that for the first time in the nation's history, The Canadian Real Estate Association reported a billion dollars worth of home sales. The credit environment in Canada also remains favourable, with the Bank of Canada having recently reduced its interest rate to make mortgage financing more affordable.
 
"There was a 3.3 per cent increase in home sales in the second quarter of 2007 taking the year's growth to almost 8 per cent year-on-year, there was almost an 11 per cent year-on-year increase in average Canadian property prices in the 25 main cities with a national projection of 6.7 per cent for 2007 and 6.1 per cent in 2008 according to the Canadian Real Estate Association," says John Prior, the Principal of Undiscovered Properties.

He continues:  "Because Canada's prospects are so healthy in terms of its economy, its employment opportunities and its housing market, in 2007 there were so many people emigrating to Canada that now, one in five people in Canada is an expat which is the highest level in 75 years."

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Article first published 30 January 2008